CI - Earnings call transcript Q1 2022

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Operator

Ladies and gentlemen, thank you for standing by for Cigna's First Quarter 2022 Results Review. At this time, all callers are in a listen-only mode.

We will conduct a question-and-answer session later during the conference and review procedures on how to enter queue to ask questions at that time. [Operator Instructions] As a reminder, ladies and gentlemen, this conference, including the Q&A session, is being recorded. We'll begin by turning the conference over to Mr. Giacobbe. Ralph Mr. ahead go Please, Giacobbe.

Ralph Giacobbe

Cordani, you. Good I'm Relations. year. Cigna's joining call. are Thanks Officer. me Officer; an Chief financial and Brian XXXX the morning, remarks Giacobbe, Senior outlook everyone. David morning Ralph this Investor the for results, well Chairman as Vice and on In Evanko, on Executive today's today, line Thank Cigna's President With will our Brian for quarter and Chief Cigna's number a first Financial update financial cover of our David topics, including as of

These per performance. recent from the differ release and uncertainties earnings cautionary release, current Relations and As our these to which in uncertainties of the noted and and are income in today's be statements, actual with in SEC. revenues, our describing the basis reconciliation materially the on comparable measures known directly as to posted of A adjusted United use most income statements is subject in in accordance results, regarding our we shareholders our our measures, contained operations note principal determined from description statements not earnings including in to and of and Cigna financial earnings financial filed earnings measures uses States, same operations GAAP performance. making contained otherwise adjusted from with net are cause income measures, XXXX A to when results certain adjusted In GAAP. Investor and future accounting today, the share term these respectively, most accepted is remarks that section expectations. forward-looking financial of generally in release, cigna.com. which risks risks labeled our is as revenues, will some for adjusted our We total the outlook could reports the today's principles

items to pertaining results David, a I disclosures. to call will few financial and cover the turning over Before our

$XX in $X.XX an quarter share, integration our of for we or million, the charge costs. item Regarding per recorded transaction-related results, first, after-tax special and

in described income are results. As adjusted from discussion financial earnings today's special from revenues excluded adjusted in of operations items our and release,

accident comments when year our including that XXXX our do we and outlook, will note performance, includes impact share make a so basis prospective anticipated please of Also, regarding repurchases we other financial Additionally, assume the dividends. may full of the potential outlook full close year XXXX future that of business and that on from the today. will quarter assumes Cigna's life any or benefits impact second divestitures combinations pending not does but in businesses after divestiture that International supplemental XXXX, occur

opportunities you York New to Day Finally, that, sustained and growth. I to City, on With of sharing like for forward our would June upcoming strategy where call and remind success Investor turn I'll X David. the look to we our in over

David Cordani

growth. performance deliver relative morning, thank level strong X, of will call provide host which strategic drivers with insights and to Evernorth a going quarter and XXXX you growth additional of financial our on performance. results our Today, with and start of our and our our We're to our year, of comments all are drivers pleased Day, and deeper sustained on for outlook June Investor we'll differentiated Healthcare, driving details my keep execution, take first good questions. your profile Good vision, Ralph. of results will off to defined our Thanks, everyone, to the Cigna and very key today. our and a the will by both relatively the focus across with for positive about momentum brief advancing growth. we businesses expectations. the I'm overall, provide attractive Brian EPS Then some we'll and then that adjusted We're our initial our focused strategy above delivering specifically, joining

So let's quarter, $X.XX of billion delivered we in. adjusted and of earnings $XX revenue adjusted In first the jump per share.

a of now achieve full for our results underscoring result company that adjusted another EPS view we guidance, of will quarter this raising strong our XXXX. performance year As we our are in strong year our

shares deployable disease We a also generate for all to hard $X $XX billion work to to track remain on and repurchase take for least our billion thank team to directing that outstanding minute led in results. the year capital at want their our I

result relationships, colleagues strong promise enables the customer to shareholders. results world the are XXXXX in our which delivering And us to market in in grow expanding a committed than more for all our client of Our our deliver out. as day day and

and Now let's platforms the take performance. drivers look Healthcare Cigna Evernorth of their at and a deeper

breadth of our an outstanding including results of pharmacy of bottom The governmental the the year and over by performance paramount way a they of time delivery importance. with health point Accredo is growth an this affordable which clients organizations health price systems. which wide strong service in Evernorth and buyers to health and partners number one XXXX, key Following increasingly portfolio in and care the people of Evernorth consistently with we're right of and months depth environment, of is In top plans, in and expertise. business care range treatment maintained I is continues past specialty the attractive getting growth driver an fastest-growing in the to momentum employers, Scripts sustained with at our driven the Evernorth's meaningful of quarter, of and meeting line parts the resonating and few represent part spent our a services

the upon and rely solve pressing services health most expertise these to care clients needs. Our

Others With into specialty our broad that means of solutions table. strength of our the our are health some meet unique services. of more tapping pharmacy For the clients expertise this pharmacy portfolio More are the clients, our that support. and me behavioral seeking high-performing capabilities. others, leverage

health identify provider to to the patients to in with for their service get access Cancer and National oncology their case innovations This this And consult designated service powerful the leverages outcomes, personalized our new mental patients launched partnerships care patient's and care, with and analytics financial collaborative suite keeps connect service a oncologists solutions close experts This recently and to augments lower including health cancer process Evernorth family. costs patients services, example, of with Centers. enables solutions management, cancer. research importantly, to existing For providers. and home oncology pharmacy to latest Institute subspecialty support our better

a we Cigna a Healthcare announced way utilities that drawing in Kaiser the and Department a on ago, Additionally, for Defense, our which Kaiser's creates our of serving collaboration of relationships Permanente. Evernorth with both Evernorth Therapeutics customers. renewed new on for and platforms our opportunities between range recently We're were clients of for strength and of broad track the and couple offerings This strategic Prime new long-term weeks a successful across extended periods. both of builds example

our XXXX are to for Finally, we come to to seeing Evernorth in years value, our clients even services early strong in are Evernorth but coming and particularly of businesses. portfolio still biosimilars and over it's additional selling amongst see new opportunities strong expect the we we season market demand existing and retention continuing the more to deliver as more

year. strong a Healthcare, delivered Cigna the to we start to Turning

improve last reflects right ratio our right implementing their programs projected. right for us actions at efforts retaining we value that teams cash their with was economic predictability in and these better we In benefits a quarter the achieved of medical including are initiated outcomes. to growth actions. strong Our and to partner complex that talent, guide many partner and membership they sponsor our programs to productivity services, US risk during and uncertain and managing new care employees, with times. results presenteeism, of the trying targeted and during strong each year quarter place the and XX.X%, health employees emotionally Employers was them disciplined strategic developing which during employer navigate pricing supporting US than financial to for to employers the time providing is care improve the the the This through companies Commercial, when at segments. turning right to programs affordability we flow businesses across an their commercial us in our landscape growth programs greater growth while and ability the At the optimizing time, environment are a taxing them for had attracting tell

as growth Our business and quarter International also contributed our during it growth the retention achieved customer levels. to higher membership

life, divestiture We health With margin prioritize government our business. US on serving accident governmental and expansion in population. with to track was continue divestiture organizations, also down business focus opportunities the as organizations International mobile for on benefits supplemental certain completed jump. attractive to see our sharpened services, employers, as globally Texas and our our expected we multinational the of business, enrollment and we Medicaid countries remain of non-governmental In the

We actions business continue the position long-term. and government over take to growth for in our to XXXX

wrap to up. Now

and Our while are growth improvement strong. drive for lead to paying demonstrating continue we the to first a navigate path adjusted our XXXX. $X.XX needs continue strategic dividend and our over through in momentum in least we building that, stakeholders. Brian. shares call are in we're as the With make our customers to the as repurchase of And delivered and underscore $X clients focused we They on benefit of continued our business to company. of serve all meaningful quarter dynamic our now, the as of this turn evolving to and results EPS our investments well I'll at We and environment with billion remaining margin execution of ability

Brian Evanko

results, discuss outlook I'll morning, Good year. of quarter I'll our Cigna's David. first Thanks, full the XXXX key for updated review everyone. Today, aspects and

our our give share, we with the of full earnings our reported earnings strong off representing confidence were our least at per per continued XXXX our year growth least adjusted This to to pleased us noted, share outlook adjusted expectations. year, momentum As are David EPS. quarter with increase above at to the $XX.XX first very performance of XX% as start combined

X% first consolidated after-tax and of growth $X.X adjusted highlights, some billion quarter specifically, the earnings key $XX.X of at million, earnings adjusted $X.XX. financial adjusted per revenue Looking include of share to

on segments, I'll comment first Evernorth. our Regarding

high-performing $X.X to in our continued adjusted with and customers. for specialty earnings First our quarter growth billion, both XXXX our billion focus in solutions adjusted by line pharmacy driven a in Evernorth's cost lowest revenues and on grew strong clients business were net XX% $XX.X were the quarter expectations. pre-tax and delivering results

our as to expectations. continued to investments relationships, of perform with solution businesses continue the capabilities. digital very Care also the These continues the growth, support new our expansion make in for of line Evernorth ensure bottom differentiation capabilities. We strategic well, our scaled client top and of with Evernorth well as and investments a expansion Evernorth meaningful and Overall, development attractive line

Healthcare, Cigna affordability as XXXX to includes the for US international health margin and in impact during having XXXX. expansion, government US actions reminder, now We Turning commercial, pricing retained prioritizing which, businesses. taken a ended our and year targeted

drive to expected market customer we're pleased also segments growth of in started We commercial our each the year. and with how we US

lower case due adjusted were testing in the was counts was Cigna revenues In adjusted overall, January, XX.X%. its $X.X first but care throughout dropped $XX.X care was to medical pandemic, treatment medical March. COVID in the XXXX better billion, than and significantly Healthcare at our ratio For costs. ratio the incidence quarter February pretax COVID were billion and highest quarter, level The and earnings expectations primarily

net the as Notably, an and our medical with treatment the pandemic asset customers the we Net Healthcare in XXX,XXX through almost care sequentially. the decreased, Cigna US specialty investment in customers. Cigna Healthcare XX.X our continue during across substantially and This earnings to ended than health. divestiture and in We growth entirely favorable as business. In also approximately and million in enrollment and X%, quarter Overall, strong our Omicron portfolio. total, a expectations, medical approach segments medical costs. International January customers, grew recognize we observed fee-based solutions. increase consultative growth Cigna total is by a customers alternative differentiated our in contributions of all the was driven our peak, even by of inclusive the XXXX. income strong, value lower Medicaid bring US of or on we as to of Importantly, expected, clients off lower customer our driven Healthcare's strong Texas growth partner ratio, innovative start earlier subsequently market commercial was government exceeded severity

Corporate portfolio. pretax Operations, with million. quarter the loss Other first adjusted we delivered For diversified our the was Across $XXX and quarter contributions across strong enterprise, financial XXXX first results

At us gives line continued outlook per moment. in will confidence detail full the full we our strong year expect our share to XXXX, as and respect with Cigna with grow a Now year growth for to start outlook, strong Evernorth, XXXX. increase and earnings I our bottom all while line expect with over continuing both long-term top while innovation. continue growth invest to performance In expanding we margins in to in customers, to targets, Healthcare,

We to of customers are growth XX.X%. to at raising XX% our least medical care our customer XXXX and outlook reaffirming of ratio outlook medical XXX,XXX

For XXXX adjusted now full expect year earnings Cigna approximately Healthcare in we billion. total, $X.XX of

share, a as are at EPS Taken earnings our expect per now over whole, least our of consolidated growth $XX.XX we adjusted at share. XXXX representing and be from per operations raising income guidance to least XX% reported

position our to XXXX moving Now capital management outlook. and

XXXX, increased to per of generate and as approximately X, have $X.X to We the million for strong billion. to cash dividend expect our shares XX% by return attractive repurchased of X.X In May capital. share. quarter quarterly And year-to-date XXXX, our $X.XX flows first businesses we we continue

XXXX, the in from of full divestiture. XXX occur XXX million prior updated at the continue from to $X shares international expect anticipated to an now impacting and our shares, deploy at later primarily to we $X.XX share We billion million quarter of for guidance, to this cash year now least For share our the expect full second due year expect our the at two of million increase billion average the to weighted midpoint flow We of closing operations repurchase. repurchases. to timing of least expectation shares timing

financial the is until Other business complete. operations divestiture within this reminder, As included is of and performance Corporate a the

attractive sheet balance strategic and our on drives from our outlook returns strong, cash benefiting Our flow and capital. orientation service-based strong efficient remains that highly margins flexibility,

increased with strong giving start to recap. confidence first diversified the growth on to our quarter deliver portfolio. expectations, our bottom deliver to line Results in top strong continues now So while to the our the Evernorth contributions and expectations, year has Cigna our line were above had across strong in Healthcare that, $XX.XX. our reflecting a us our to Day of on discuss we'll with of look XXXX And continuing the outlook you June upcoming I at strategy call. EPS our financial X. to least Q&A over operator turn guidance the long-term at portion of with to forward and our all for the Investor performance, it

Operator

with Markets. BMO first from Mr. question comes Our Matthew [Operator Instructions] Borsch Capital

ask may You question. your

Matthew Borsch

on national employers. could probably market was account talk I guess I just as you it and I gather enrollment, you that? wondering how if so large selling from the you gain as to season, just talk saw the ASO Can to middle that much is from

David Cordani

good Matthew, morning, it's David.

As One, in National Middle the commercial the growth of block commercial the few of our things. full of segment. services all Market and business. each our a to retention start strong with Select and segments it. as our with I'd relative portfolio our Brian ASO the self-funded our And appropriate prepared noted noted to services are remarks, quite well attached outlook is year specialty year highlight my essentially across across pleased we're performed Accounts, And I portfolio. very the

with we're further of relationships some Market. sought So, we some move to pricing across we've business deepened the some the portfolio notably had adds and forward segments. and new within wonderful the Middle in Two,

self-funded all So, noted And both and as headline strength able have program opportunities our well the good adds. ongoing very the with clients self-funded know we good as you and the retention the we're you we business which to essentially across some as appreciate good development new around collaboration alignment, really from there transparency, board because deliver. is as

Matthew Borsch

you. Fantastic. Thank

Operator

Mr. you, Borsch. Thank

Wells Stephen comes Fargo. Baxter Our next question Mr. with from

You your may question. ask

Stephen Baxter

love guess, about previous you. growth any a product? vital Would then, And how the the you rate sense split in are think bit. And the I new in Thanks. just have look that hear at Thank love of you rebuilding as about to where on retention group would to the bit you hi. that follow-up sustainability that compared to guess that clients? given the you just stop-loss to wanted and little for better I in you business get a of color I of process margin saw on a Yes, little then growth between how years.

David Cordani

It's Sure Stephen, David. morning. good

to question. So, a your dimensions of couple

First specifically retention we were retention resonate. further side that showing rate without a pleased little even the rate execution note we but our than the would the broadly the the bit segment our rate portfolio portfolio in stronger continues guaranteed on to I risk we the cost quite our speaking or and that product and of anticipated a where rate retention with portfolio for -- across bit Select pushed was

an the have. mix to achieve we of Secondly, ice obviously, retention growth

portfolio We was to shows Middle high-performing in and subsets of a Market very That's growth. the both Healthcare Healthcare new our business dense we that portfolios quarter grow that nice prior win relationship it's up Evernorth as and talked because standpoint. to business geographies we achieved relationship new adds. large new through introduce expanding a where an have relationships highlight between long-standing have in to to excellent Evernorth the Cigna a existing which portfolio I able in and we're from large that had Cigna collaboration locally or

in stronger I doing is retention the across work retention that So, segments is and would new both new in bit relationships great that added. we relationships strong out select each and board team existing of segment business call adds that the the a

Operator

you, Baxter. Thank Mr.

question next Our comes from Mr.

Research. with Lake Wolfe Justin

Goldman your on ask test line question. feature. Sachs. next ask open, is Mr. The question you go Mr. mute line is may with Lake next We'll comes you your the Please open, Nathan Your to your may question. question. Rich your from

ask your may You question.

Nathan Rich

given revenue looks little Nice flow I sort Is might It about a the investments. quarter, guess or new it maybe and the we sounds where from? the in on about question. like we can year, I more quite ask you. gains specialty maybe some a the think Thanks that should to you line. kind Hi, bit to continuation then continues like I for Thank strength, Are to bottom on for of one-time, higher exclusive And SG&A through expenses didn't good revenue that, relationships for you coming of, tailwind. have been in think in some those as the the specialty side? And be Evernorth. wanted performance segment? morning. rate see talk of are that mentioned run David Brian, that the there.

David Cordani

Good It's morning. David.

Let first Brian your to of your me take question, the I'll ask the part question. of and part second take

As of you our performance We're out, as that, performance the you specifically multiple pleased serves to segments. specialty Evernorth specialty strong. our be and really I'd called within continues remind portfolio, overall portfolio, the you with quite specialty know.

there's specialty capabilities, coming typically match the the success years. but on coordinating one note Specifically, medical coordination direct the from patient terms of time the right of medical that where Think where delivering on highly a require including because the a specialty serving basis, time their as made only supporting needs. strong coordination that appropriate, professionals of performing perfect and that front in-home individual of the of and terms Accredo space for their will in are capabilities about needs we the as us decisions biosimilar our trend at drug not the in right excited purposes the a team know appropriate, standpoint. in you Scripts side you and of by for breadth at high for And transition quite well about those patient services see is accelerating biosimilar would the of in I'd as we're expect, positioned care that, unless focused equation, care, also

the of changes healthcare we our as I capabilities. to but of out Bryan a any specialty and forward strength your as transition let both call positioned unique So medical of as biosimilar of second me leveraging well consumer go capabilities part our as drug our the question. portfolio, as portfolio, growth, our specialty professional on in well driver well would for evolving and not as to that part part the expand acceleration class specialty

Brian Evanko

Nathan. morning, Good

terms for year how Evernorth there. about in quarter expense the vis-à-vis So in and growth the revenue growth, of the full thinking the

As up XX% while Evernorth, you noted, revenue was the XX%. SG&A the quarter-over-quarter was up

is think growth Evernorth. of You the predominantly future can expense within growth fueling

Care to care I be a When health build in Care to you Evernorth alternate X% you will multi-year the continue Care. coordination earlier, general So quarter. of the in of be investments same just to We will delivery, platform. within care. it that talked we're Care That to home full Evernorth. importantly, out think income virtual investments But behavioral making first health about sites our making Care up there. for in our and services mentioned strategic diversify up in Evernorth portfolio where our won't was investments the about to There series past We're limited our be from for zone. a will year, revenue be XXXX, management,

So faster you expenses for within bit transpiring should quarter. a not think the of grew first margin though even year the than full erosion revenue

Operator

Thank you, Mr. Rich.

with Nephron comes question from Mr. Josh Raskin next Research. Our

You may ask question. your

Josh Raskin

are I Evernorth? enablement I interested that to plans? that an console more the services in through the there And existing Good launch. you add future are your around who targets for the can the guess, speak importantly, can process think health you service physician Thanks. other you to internal And announcement morning. that in was sales Is product? cancer mentioned you

David Cordani

it's good Josh, morning, David.

relative the and you re-amplifying appreciate oncology the really First, to opportunity. space

but the with is United we well really And continues States in place. As United grow. pleased markets the in that volume the know, other taking of to as oncology needs States the we're innovation

we're to individual patients. an approach So taking analytical identify

serve are market patients the that So individual we today. target

analytical to service to we'll health a bringing the as identify patients matching able determine Evernorth the of and a the coordination consult be have in consult diversity relationships. So excellence by level and an oncologists oncologist oncologists quality, increasingly our patient think precision, to their affordability that individual equation back themselves offered of advance patient going and their them the that be we to to of playing precisely could who bring clients Cigna with excellence. their the matching through to overall healthcare that center about that so to cases as either Healthcare of our in And specific in forward, center transport with many without care we the needing a where patient example

bringing and the So coordination Precision the and two data the using care by our of it's an partnerships. example

service terms clients So services of be then individual increasingly our and of largely again health a not forward. rolling others. to And rollout Brian the relative Care, care this the appreciate Healthcare target And service question then audience provide data secondly, approaches in but Really of opportunities if is and of latter I Care offered more patients harnessing in we'll Cigna to heard about your of talk to additional types the taking in that's seek year curate to right oncologic about of breadth through but and portfolio, part Day to be these the be your coordinate taking through real-time indicative at using think to programs we additional waste made place to now that equation, our able as we'll – more as some out insights your our Evernorth and bring similar and Evernorth the delivery. some data Investor what correctly, reference plan question.

Josh Raskin

Thanks.

Operator

Raskin. Mr. you Thank

Fidel Scott comes next with from Mr. Stephens. Our question

line open. Your is

You question. may your ask

Scott Fidel

Day. to Investor us could interested Hi. this industry? looks you time, strategy we MA especially on which out that Good look just XXXX, for another give growth clearly to refresh some solid is morning. market in got the if final you've updates out to how point rates topic that for at now this resume But to from you're XXXX, more just looking into as pretty Thanks. we've be for the in been the Sure going the delving

David Cordani

morning. good Scott,

we the just You're right direction. will let profile in broader cover but June, that me

clearly market government short specifically attractive And in initiative. growth and three for a opportunity. In and our well continue to Medicare growth expansion of was and we're while XXXX, of variety we that sustained reasons algorithm our as a of year specific First foremost, within Advantage including segment our XXXX see growth conditions. very

just a was strategic below growth average our three-year end our range. low of Our bit

attractive couple positioning more we in to in front opportunities higher our positioning, and commercial in plans our in year building overall drive stars our XXXX, investments cost XXXX. we've of to are marketing our of a terms and we conversion low XXXX We'll little of We'll further. will by – Now growth medical us. specifically in and And importantly, early strong off distribution. building would that's to expectations, made targeted whereby years, specific And you realize expansion over the leverage get now NPS remind initiatives, some in we're in and our to expansions sup then begin our on we'll market PPO and harnessing investment yield at I our Investor expect our med the yield we agent population organization. largely PDP the HMO Day is But demonstrate plans and market last we of that but you are MSAs. the traction out three, on individual of oriented year have Two, one. time individual to targeted profile an

we're growth and year for an be will around attractive plans XXXX. expectations building our specifically, So our

Operator

Fidel. Mr. Thank you,

Our Mr. comes with Barclay. next from question Steven Valiquette

is line Your open.

One question. moment please. your ask may You

Steven Valiquette

Thanks. Yeah. Good morning Yes. everybody.

XQ So is to just non-COVID better-than-expected narrowing Also MLR XXXX, baseline quarter? regarding versus results? traditional the I'm there the trends, any thought the the quarter medical further cost end second given first Thanks. of trends the pace exiting the of utilization range was curious, and into guidance the top MLR any there around color of

Brian Evanko

Steve. It's Good morning, Brian.

I'll both So, questions to here. of tackle try those

particular earlier, quarter. expectations we saw favorability costs COVID compared In the come terms of the first I in the first some in medical in as cost the quarter, performance through form of in to our noted

of that across but and to testing first the quarter for true forecasting was for a fashion, what had the Healthcare. came business both treatment the in book bit pronounced we the And of commercial totality So year. been most in favorable in Cigna

basis, it the of seeing the non-COVID, low-to-mid-single-digit if to, type them much as We're that to were of look where with like non-COVID XXXX a capita preventive per expecting in really are not at were expectations line acuity to a blood quarter it for with things really basis. line all And cost of non-COVID you in our costs cost they cost kind in the normal essentially right colonoscopies terms relates came of any screenings, trend in services. meaning, where were mammograms, or signs on pent-up As we're in in XXXX, very exams, XXXX on trend the we matter well. on demand, compared spikes first trends a seeing emerge

So non-COVID line up coming had the shaping expecting what in year. with we very much been into

midpoint As more outlook care year to the to thing where medical towards on one based respecting you're coming the XX.X% quarter quarters take range year. that a ratio, quarter the posture to we've past half you there's maybe over like years. This range, for the three COVID the to relates so right given had us prudent the assume bit But range, of our prudent far. full We would couple reasonable twists be and the despite a to being XX% as was the felt lower and shading of a to the into year we reaffirmed shake about of out is were likely thinking what it slightly seen the lot favorable. for a in it the just and do full turns first of

Steven Valiquette

it. Got

Thanks. Okay.

Operator

Mr. Valiquette. you, Thank

Credit Suisse. from Our Rice Mr. next A.J. question with comes

your ask question. may You

A.J. Rice

everybody. Maybe you difficult might you're opportunity. the on there, is look update having know to just give little quantify bit any it I'll that a it's discussions but what guess, can out like. think I about us with some HI do biosimilar I ongoing any and get of for the clarity? what And that's be the even opportunity And I will guess, might business? mind, the with your both you a Evernorth you sense benefits whether ask in various players? provided degree to

David Cordani

really net We to to single Good positive. morning, exists. us some opportunity and it's relative on standpoint -- basis. convergence that's harness there's we improve the And A.J., the Healthcare ways other Maybe think seeing the comment. from point inferred Evernorth the -- upon it's to affordability. a a net don't it's our opportunity that relative given We're which influent is your this In a go-forward think to ways, We is right? with early a model, a services have leverage David. further positive in some in Evernorth trend Cigna

we expect or the ramping And able the with XXXX we activity. have the will will drug-by-drug though our choices as see that as of single XXXX as teams not you programs would class-by-class, year, to as clients. in is well manufacturers it's be And place. a offer our we with working So are

will clients evolves. the importantly, the more very be pronounced biosimilar think, supports our as and nature beneficial I it the trends, Evernorth even consultative more of with way

an and beyond. amplify say, As we’ll But have given you would suffice expect, our important its the seek some area be XXXX will there's singular with to XXXX this energy to begin bit portfolio a at specifically and an to to specialty Investor convergence, Day. relative inflection traction, is we but respective our ramp year, more not a XXXX, point,

that, customers to and it's from to Evernorth relative and So value and have we're improve customers the creating our positioned for clients affordability benefit clients, for patients. well our

A.J. Rice

lot. Thanks Okay. a

Operator

Mr. Rice. you, Thank

Mr. Taylor from Cowen. Gary comes question with next Our

open. is line Your

ask may question. your You

Gary Taylor

couple were Good I down more to material the Hi. morning. wanted A the X% PBM, yet little year-over-year. bit prior at about a don't think I look vaccines adjusted claims ask year. of we questions. to when

you you which still there retention see was said think better to thinking? mid-XXs. if to wanted early, mostly I health at impacting that. few were than if It similar, just PBM had I that if it's to was early, the XXXX, plan ago, about when expected months a was was season, selling update wasn't just any I So losses related very then not, you that it asked And see but just vaccines. wanted obviously, least to

David Cordani

Good Gary. David. It's morning,

Brian than to Let think, looking standpoint. broadly speaking, walk-in and I at. our growth our and but ask start clearly, -- lower year, that I to is from your had me a a XXXX right. XXXX you are, historic longer no your rate and average Evernorth think, the retention Evernorth, Scripts we faming retention was breadth be relative There framing, to level that the little of lower current than important more talk phenomenal given then relative the and example, why framework an little the example bit Specific sole to should

positioned and noted new Your have to we're question, XXXX business both to XXXX I growth Evernorth, strong as on think, on and for a basis. a I another goes for renewal year

specific over talk Now relative Evernorth to more the a to growth, Brian, XX% to before PBM, bit to about I transition little a right at we're visibility.

we better revert historic marketplace pretty So in strong that. point, standpoint. is and and bit the retention Evernorth, right to level importantly now, And expect about of renewed, relative quite renewed of which current to still be sit book we some from the XXXX’s of than that is XX% as what XX% the continues Brian? here environment. But the more our of is that to specific selling portion have in year of because sits back the asking good front feel in you're right norm now, of of higher and time active we about, the to which or retention this be books to PBM a already fluid XX% we the at us

Brian Evanko

Gary. on of part the the your terms morning, Scripts of quarter Good volumes XXXX in question first and such. first Back

that. think client and flat macro X% the your is of pretty is being effect in wins net terms and down function right conclusion vaccines largely year-over-year. the the a losses of The of were I Scripts

quarter-over-quarter. material within of so If driver you that's first a XXXX really or look the so at first not million quarter X quarter versus Scripts, XXXX,

specialty through more and have have with count that here, and Evernorth's is, Importantly, metric we to platform, Scripts. I the each though, coming measuring becomes passes, are volume overall And not volume total as more less important performance. more as to our mean script less linked to see David, more we earnings into more what you're our day and coming that, pharmacy, as by things and directly through Care revenue associated that going more do

terms example, volume. of it just than X% represents Specialty the of an mark XX% but overall our to over prescription within revenue, as crossed contribution Specialty, less overall Evernorth in So,

prescriptions. of XX% over So, the the revenue, less than X% of

the that away encourage So gradually when business just again, at from you I totality. of in move the would looking metric, health Evernorth you're to

Gary Taylor

revenue Yes. I it. mean performance the supports

got you. it. Thank So,

Operator

Taylor. Mr. you, Thank

comes from JPMorgan. Ms. question Gill Lisa next with Our

ask You your question. may

Lisa Gill

Hi. integration I And about about think Evernorth David, how to how overall person how going follow-up just whole fits the morning. we really there's market into we health. about been Thanks on in that? pressure want very about much you thinking capabilities think talked care into that? the think But capabilities? again we you Care think Evernorth times think and good -- behavioral And so MDLIVE offerings heard about XXXX? about health many some we when And sitting And of two. about when Ginger into how do the and your I've

David Cordani

morning, Lisa. Good with morning. to you this chat Good

couple of your different flavors I to there's a question. So, think

be Let succinct try to them. can me with I as

the the and learned coordination as in whole of care or person health First, services as been mission-critical we've and environment. a society COVID this amplified remains has

through it's be So them expand covered the care background, it's virtual services first, Ginger. as bring likes you But access whether solutions services, expanding then, whether it's in-network do next of and care, a behavioral services point capabilities, the way together. we whether have continue by first network behavioral coordinate is that the through traditional a like being to how to step sense, of expanding in virtual

across the underscores asset real coordinate couldn't services, you pharmacy And be at that to bring more patient be off opportunities behavioral, et our years. medical, pleased time services, part commitment MDLIVE. as as walk you having more or harnessing able basis as in level. a front data that services of, to one innovate highly specifically, patients and coming to for society view benefit by take let's because of significant that the those individual, is and example, care virtual we MDLIVE of of so, personalized MDLIVE technology And and and symbol presents a to a the a great on a biggest our coordinate and cetera company

organization we've more some dependent our volumes then in year-over-year the care XX%. click cultivating off is employer, upon a it As remind through it's end you professional model of of with BXC with relationship is disruption the versus a only to we fact BXB about we're up down XXXX XXXX, would MDLIVE I triage marketplace, building whether a and health seen activation our a another customer, it. then, the not that or BXC plan Or QX QX notch, and health model but a an underscore

and a and tremendous to significant pleased real just thus represents be an highly it, being opposed So coordinate having we're area patient-centric able opportunity conviction point as where our we again have solutions with to point solutions push far. time progress in

Lisa Gill

this opportunity kind market cross-sell is for Evernorth driving about answer second a that Do you to part you? opportunity the bigger this? really, think was opportunity Analyst going I David of the in Day, question my you a with this this Health Cigna you're we sure I'm number And market around feel of you do XXXX? know but of about the earlier at talked how put any but of -- can

David Cordani

Yes.

at Investor So touch Day. didn't Lisa, we upon you're I'm upon And right I that will touch sorry, that.

So, I'll opportunity. just try tremendous we by to see what appetite saying, absolutely, your

portfolio, Day. But an to Healthcare is stand-alone integrated minor and when on health colleagues toward, clients delivery and through relative leverage that that. eye Eric to client built it systems Cigna plan think walk Evernorth Healthcare, Healthcare's employer have at yes significant relative market as et affordability through a Cigna you basis. there's able the to points Cigna we're about to Investor not our quality walk simultaneously are cetera be already a we'll limited and and between with that our and within opportunity will to when But to go-forward everything bring relationships traction proof we serves, proof and improve it, that, to services So, those to points we're Evernorth importantly more building

Investor to what affordability, other amplify Healthcare large So improve present Cigna relationships tremendous of we and quality, Day. terms or in for see that that and whether to broad, we're quite addressable be a your ability clinical quite market and personalization we will opportunity underscoring point it's the building

Lisa Gill

Okay. much. so Thank you

Operator

Thank you, Ms. Gill.

next Our Gerlach Research. with Wolfe from question comes Austin

You may ask question. your

Justin Lake

Thanks. This is Did I get Lake. this Justin in time?

David Cordani

but live, Justin you names. different you're have

this to voice. It's your an have you hear So alias good morning.

Justin Lake

should probably function mute I name. can't the I my out change since figure Well,

secondly squeeze how So numbers just quick I on rates Thanks. help perspective? And seasonality first based. interest second little we're us look in seeing be rise half you an next that out there here the on the of could two or year appreciated? in give affect questions can would you any two to over from a earnings earnings want One, in color terms half,

Brian Evanko

Justin it's Brian.

the sheet So scheme when in those positive draw side also look more fixed spread tend are carry than or shorter The term or grand longer-term We not a asset of favorability at up, you direct interest and some you as rates, the the in a nature that creates investment side, rate and asset interest terribly majority Cigna terms should and on liability of conclusion such. exposure side basis net material of directionally slightly which income the balance quantifiable instruments have rate. terms impact. in rates our liability the the whether terms the in about to you of of move is macro side think in but things variable on the

$XX So range call it It's the in, -- $XX this shouldn't you point million but you basis terribly to if at a were million think in XXX rates annually of it material. order move as to magnitude. in look of mentioning to

it talk seasonality As in to relates the earnings and I'll terms. EPS

the the as business out-of-pocket be to seasonality year, just to lower see frequently. maximums about more point half the you quarter, overall year first first book strength of share we met earnings given year or of the quarter of the in the fourth the should tend then half full deductibles half of Given Healthcare tend the generating emergence. half in of the Cigna per the And of is and think quarter where back the a roughly relative to third

little you bit a So quarter quarter. of being stronger the than should third think fourth

Justin Lake

that. for Thanks

Operator

Mr. Lake. you, Thank

question next comes UBS. Our from Caliendo with Kevin

You may ask your question.

Kevin Caliendo

the can that does What about? came future? information partnership. on to wanted just meaningful Kaiser bit I How a go it mean? can How Hi. Where get it it the be? little in more

David Cordani

Kevin, morning Good it's David.

talk remind into to. company which I we a imperative will. referred the get in we opportunity, about you Kaiser we I Before that the that, strategic

service, identify I'll clinical reach, with Why back tenant of more partners, to we're guided part objective Our the a create Because quality. be that to we come as undisputed seek choice. opportunity Kaiser, together the value. affordability, More if could more that suggests to that? could more do potential alignment have we we by which we more say

as So be we strategic more value prepared I we'll up Prime Kaiser to relationships fits remarks, to Kaiser where it Therapeutics totally access can where renewed specific Prime multiyear builds like of Defense that both look the could are together Therapeutics Department a cetera. noted with represents with where different track on a UPMC and record and excited organization And pleased successfully with at a successful of not we in expanded with and affordability. It and category organizations the improve the Department recently opportunity et in partner into the relationship my we

leveraging way Healthcare only So but relative different Evernorth's capabilities. a Cigna to and orientation, collaborating many it's in an in the cases not capabilities

attractive in growth significant growing co-innovate will together the Corporation. XXXX, So in of major breather we've and it together over the or I and we not your relationships as proven the driver as size to view other coming with which as of relationships. see will as top question it relates line bottom But it a reinforcing bottom line would we and and core an have both years as that for line given collaborate opportunity be top

and and to innovation partnerships a clinical some and So serve reach I'd quality. of orientation be the category affordability ask pleased to track of better customers put build and up clients to capabilities could and make an with and successful a with we partner not shared Kaiser more you record long in

Kevin Caliendo

Great. Thanks so much

Operator

Thank you Caliendo. Mr,

question Fischbeck with Bank Kevin next from comes of America. Our

question. ask may You your

Kevin Fischbeck

Okay. Great. Thanks.

back kind of increases. just was any of the Just much what the into than The us bit bit. I if was the QX might a help in wanted outperformance the in how thinking of? stronger new be to some to beat could that versus you invest go initiatives timing you guidance little Thanks. a offsets of wondering think the about half guidance the of growth the you versus outperformance using was

Brian Evanko

Brian. Kevin morning, it's Good

with pleased strong some thing to really is, we're a in start I I the would here early One obviously, morning. So the headlines note year. saw the of having such

expectations bit were higher own the Our a consensus for quarter. first than

quarterly the beat. first think you So the slightly quarter we had different as pattern a of magnitude about

in expectations as the expectations. think Now specific just I ahead think as had there's first But our the not the the would of year of for as were in to this balance half or in being will we where might that's I about I nothing emerge mentioned posture at you Street really $X.XX. call of terms but well, tune you come quarter same out as earlier own the year the to -- And a EPS for quarter raise take issues as that the into just prudent just of the that things in later an keep feel expectation one reverse to We by second alluded least looming year mind $XX.XX year. is the to.

as evaluate to bring year think other As always, digital you there's we'll also nothing unfolds in of as particular technology market. additional But the capabilities again, the investments we're year. to and flag that strategic balance I'd the about and looking

Kevin Fischbeck

conservatism line in still investment or range more quarter guidance the some the $X.XX there your in beat or the own versus is delta? with expectations, spend Is

Brian Evanko

Yes.

in As Cigna the we I said a with earlier, point we Healthcare our release above in being this is at expectations. particular this just year move think prudent

Kevin Fischbeck

Thanks Okay.

Operator

Mr. you, Fischbeck. Thank

George Hill Mr. comes question with Deutsche Our from next Bank.

You your may question. ask

George Hill

Brian, level of not of a contribution? relates state seeing us give while there. would if kind profitability movement PBM you're how specialty of talked we're guys, raising chance have lot more a just and any taking seem you're going that could a about? this for the the you regulatory that PBM, love anything impact thinking we're which internally guess, about it of we the question. And you, flag on that's Rx. bunch would a to should thinking to morning, initiatives, negative business and caution about at national the David, tracking I than as then seeing be you'd I being about revs Yeah. Is adjusted less couple of Good X% thanks I'm Evernorth. XX% to OP ask ask

Brian Evanko

David up morning, it's first pick second. point, will the on then George, start and I'll on Good Brian. the

not As will date. you tremendously specific provide up order. coming, we and pharmacy with with if as importantly, profile our the of than biosimilars just you here, specialty just about on are top there's business, different over period to to look segment the the it the multiyear mail pharmacy just, performance forward. or overall margin specialty sum Directionally, growth a specialty not had our we've But line think as should be bottom to again, fuel attractive you client really think PBM relationships continue some were really pleased will of some to we further and or if eggs, we scrambled when about just many you you

on overall the second than to David, one up profitability within of tend as client question? margin do profile. and George's we terribly it you piece of silo necessarily So get north. ever want just think not shouldn't pick overall But being different you to the segment

David Cordani

Sure, George. environment active. No doubt, the has remained

are million seek time, three As to the in have differentiated assurance capabilities? level customers patient around within No. The that caps macro, a with more to but de-railer outlay still years been later. of do assurance against the an day just we one it clinical And affordability, our launched and improve note, I do XX-day from individual state, program right able strategy always in quality any day just as we the services course, was seems And XX uniquely any well item are patient one affordability. aligned example, think we marketplace. do. federal relative customers. today, differentiated customer what that, drive you a for actually out service like assurance in of your see matched or at of years what we up our a to we've program we're patient aspects insulin noted $XX. three an that of portfolio, designed quite the initiatives further question or for pharmacy and yesterday, proud our do program I ago, All not see to And standpoint, item, theme as at just as business it's we would and as underlying And one we

to services, So question, capabilities, not we services mechanisms to relative rally item more services innovate to opportunities able we're We integrating approach see than any strategy our your active. do it not redefine of those to we broadly way our a more as as relative as funding, seek one and our creating to rather to and breadth see market. bring is the the

George Hill

That's Thank helpful. you.

Operator

Hill. next comes The Goldwasser question you, from Stanley. Ms. Thank Mr. Morgan Ricky with

question. your ask may You

Ricky Goldwasser

Hi. Hi, morning. Yeah. good

So two quick here. are there ones

all of market you of current about to And David, we sort of your strategy now assets anchors on – value need as where you're you sort complement delivery assets? of now have the – think First from any of in primary any given your you care care depending that out? do about it's for with going Is specifically, earnings what just appetite or think adjusted M&A, the terms build X% upside the your in organically? think on we XXXX? and When growth to into the biosimilar pharmacy. optionality embedded X% Evernorth, the represent long-term biosimilar, this or market on of does some dispensed how target by bioequivalent plays then it And specialty HUMIRA introduction to are

David Cordani

David. I'll good your first take Brian take to it's question. second Ricky, your ask question. morning, I'll

delivery toward underscoring first back in marketplace. care comes the think care I primary Specifically, the that delivery is question and

more as And and areas home or coordinated. areas behavior basis orientation many on services. nationalized across delivery. sustainable delivery Our broadly seamless seek more in see these a health care and that to and Those in relative aspects We virtual care, we own care today pharmacy care aspects target multiple health services, specialty within is function cases include leveraged a services care to differentiated differentiate be and geographies. services basis can of care of

coordination our relates that continued underscored say, have sustained both differentiated to collaboration NPS perform perform deliver. outside very by which remains, strategy it, shared care care for but care our service trend enable it clinical as care, would -- well orientation, to primary medical partner services seek in to that cost in with health a and stated and we aligned been strategy able incentive our with virtual physical we've quality us As but has in in to primary of and in continued the physical care models to professionals primary capital-light

as Lastly, do the willing we noted in the in past, own we've Southwest. I that would are say, select as MSA Ricky to a in we

time, way we partner specialty our get conclude home the physical preferred affordability us ownership, of some to own care. assets. access and enable is to primary approach pick and I'll the ask on ourself up and that virtual that has Brian, and quality Humira. willing to differentiate well right quite pharmacy for only we balance you seek are is while If again served behavioral We in to care through to but

Brian Evanko

Good morning, Ricky.

to about market Stelara, relative even represent those ready Humira But the in getting earlier by of the terms total some an biosimilars two So to a talked XX% three question. this and years. we and point specialty to the because an X% at of next acceleration as drugs for spend. long-term you biosimilar about to how themselves alone bit X% inflection expectation, David And think response in in know about of over we're right we're Humira two now,

It generate the much two how very a able we're next of biosimilars time of period little to customers financial And Eric our going excited weeks affordability we piece to our of Actually terms will model. time very and more spend benefit Palmer about capture much talking cetera. be today. of we're interchangeability our how is will picture. a terms in to that from et prospect in So clients customers, to have ultimately to years links economic four three about be and the value And telling Day. in into market, that that our and how Investor just move comes for over,

more I necessarily but growth sense we'll want to in that of So expectations. how longer-term think to the Evernorth terms don't our about detail time at in you that give front-run of conversation, that contextually

Operator

Thank you, Goldwasser.

comes from with Dave Our final Windley question Jefferies.

question. your ask may You

Dave Windley

Medicaid they question. on slice I'm theme in be wondering is and you're two-parter is customer a if morning. if your commercial Good Thanks I of business Hi. if a catch as for you book? a seeing that consolidation in have membership. then can my wondering taking target base that is beneficiary of members on, difficult can into presuming beneficiary commercial, do, redeterminations also or turn a And that? or I'm don't Medicaid because Cigna Medicaid be have them moving the or

David Cordani

it's take Dave, questions. I'll David. both good morning, your

a I major little consolidate additional question. the they it's not value. specifically, inferred bit or in relates I'd a XXXX. as it phenomenon, look be underscore to that for transpires slicing here out as phenomenon would as First, though additional value, slice a The subset as and your whether of call may driver seek clients

be not one we've proposition fluid in care important a people live Hence unique. pandemic and again, today prolonged Cigna even the slice are national, ever marketplace. truly network coordination I say, the more supporting before few think call going not and to that is throughout terms ever. the where and the -- no that is it I access seamless is work having few like than As I'm would a And like But more learned of seamless phenomenon differentiator. to service than all capabilities continues a remains

to of to do that that be be big We've There'll portfolio that. As in or commercial we'll a not it do believe we net through into be we have programs. Medicaid the And think care or Medicaid stand period player today strategy not be between a some for in people over first relates plays seen would seamlessness but some access believe even we which planned multiyear our that in exchange have IFP a the our services our you we'll XXXX And that see have that prolonged outlook we to mechanisms in business do our of uptake whether in it our redeterminations. opportunity from redeterminations factored do not do moving or up it through. to We time relative or beneficiary. outlook. benefit a individuals pre-pandemic shows

they it through between between exchange and as do in broader gate. or to as Medicaid we redetermination which seamlessly phenomenon to see the now commercial So Medicaid way move Medicaid either a people move that a population and whether redetermination the relates a not

presents upside us that some potential going So for forward.

Dave Windley

you. Thank Fair.

Operator

I'll David back Thank you, closing now Windley. to Mr. call over remarks. Cordani turn the for

David Cordani

joining you thank Again call our today. for

a we're first $XX.XX deliver quarter to momentum. at of the we XXXX. points, increased EPS stepping strong XXXX few will our that least and achieved We're Just confident rest reinforce with into we outlook of in the results for

a is the across life people's every Our of direct change than passion day company our to result performance for the work our XX,XXX and coworkers who work, better. dedication of hard more

our our Investor more our customers more our of impact also We a great healthcare rest meaningful those for sustained outlook. our for drive to Hope to next predictable look and simple affordable are Our day. patients. the actions well Day clients to a in growth driving we're future well make vision talk and forward have and for guided long-term making as our month by as our as your progress you we about the serve you at as

Operator

days first Ladies will A review. quarter XXXX Relations for to conference Investor respond Cigna questions and of call. this Cigna's be available available shortly. business following concludes results this XX gentlemen recording this to additional will be

dialing or recorded conference for for replay. the Thank you is There no code participating. by access may XXX-XXX-XXXX this required XXX-XXX-XXXX. You pass

We will disconnect. now

Cigna (CI) 6 May 222022 Q1 Earnings call transcript